Brent Crude crosses $80 on expected Israeli attack on Iran

Brent crude rose nearly 3 percent on Monday, breaking above $80, as markets tried to cautiously price in a possible supply disruption if Israel attacks Iran’s oil and gas facilities.

At 11:43 a.m. ET Monday, Brent crude was trading up 2.86% at $80.28, for a gain of $2.23 on the day, while the U.S. benchmark West Texas Intermediate (WTI), was trading up 3.04% at $76.64, for a gain of $2.26 on the day.

In a note to clients published by MSN On Monday, ANZ Research predicted a “relatively small” supply disruption should Israel target Iran’s oil industry and warned further, indicating that it considers “a direct attack on Iran’s oil facilities as the least likely response of the options Israel”.

Earlier on Monday, oil was trading flat as traders awaited some sort of indication from Israel.

The latest rally in oil prices began in earnest last week after President Joe Biden said there there had been discussions about Israel’s plan for retaliation, which could include targeting oil and gas infrastructure. On Friday, Biden suggested Israel should focus its attack away from oil and gas.

Analysts are divided on the extent of the potential disruption if Israel targets Iran’s oil and gas infrastructure, with no clear indication of what might be targeted.

RBC Capital Markets suggested that a high-level disruption could be felt if Israel were to hit the key artery for Iranian exports on Kharg Island and disable shipping, as it reported. CNBC. Wood Mackenzie also told CNBC on Monday that the worst-case scenario would be an Iranian attack on the Strait of Hormuz, which handles a sizable portion of global oil exports.

By Charles Kennedy for Oilprice.com

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